Logistics Exam I

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Five Major External Forces that drive change

Globalization

Technology

Organizational Consolidation

The Empowered Consumer

Government Policy and Regulation

Inbound Logistics

receiving, storing, and distributing incoming goods or material for use.

Outbound Logistics

movement of material associated with storing, transporting, and distributing goods to its customers.

Generic Value Chain

referred to as Porter's Value Chain

Logistics Management

Part of supply chain management that plans, implements, and controls the efficient, effective forward, and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customer's requirements.

Four Subdivisions of Logistics

Business Logistics

Military Logistics

Event Logistics

Service Logistics

Business Logistics

That part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, service, and related information from point of use or consumption in order to meet customer requirements

Military Logistics

The design and integration of all aspects of support for the operational capability of the military forces (deployed or in garrison) and their equipment to ensure readiness, reliability, and efficiency.

Event Logistics

The network of activities, facilities, and personnel required to organize, schedule, and deploy the resources for an event to take place and to efficiently withdraw after the event.

Service Logistics

The acquisition, scheduling, and management of the facilities/assets, personnel, and materials to support and sustain a service operation or business.

Value Added Roles of Logistics

The five principal types of economic utility which add value to a product or service are:

Form

Time

Place

Quantity

Possession

Logistics Activities

Transportation

Warehousing and Storage

Industrial packaging

Materials handling

Inventory Control

Order Fulfillment

Demand Forecasting

Production Planning/Scheduling

Procurement

Customer Service

Facility Location

Return Goods Handling

Parts and Service Support

Salvage and Scrap Disposal

Relationship Graphs

Spatial Relationships

extremely significant to logistics, the location of fixed points in the logistics system with respect to demand and supply points.

Very important to transportation costs, since these costs tend to increase with distance.

Two techniques of Logistics System Analysis

Short-Run or Static Analysis

Long-Run or Dynamic Analysis

Nodes

fixed spatial points where goods stop for storage or processing.

Links

Represent the transportation network and connect the nodes in the logistics system.

Nodes and Links Graph

Simple Logistics Channel

Complex Logistics Channel

Logistics Relationship Types

Vertical and Horizontal

Vertical Relationships

These refer to the traditional linkages between firms in the supply chain such as retailers, distributors, manufacturers, and parts and materials suppliers.

Horizontal Relationships

Includes those business agreements between firms that have "parallel" or cooperating positions in the logistics process.

Range of Relationship Types

Transactional

Collaborative

Strategic

Transational Range of Relationship

Both parties in a vendor relationship are said to be at "arm's length"

Collaborative Range of Relationship

the relationship suggested by a strategic alliance is one in which two or more business organizations cooperate and willingly modify their business objectives and practices to help achieve long-term goals and objectives

Strategic Range of Relationship

represents an alternative that may imply even greater involvement than the partnership or strategic alliance

Relationship Perspectives

Relationship Differences

Duration

Obligations

Expectations

Interaction/ Communication

Cooperation

Planning

Goals

Performance Analysis

Benefits and Burdens

Drivers

"compelling reasons to partner"

all parties "must believe that they will receive significant benefits in one or more areas and that these benefits would not be possible without a partnership"

Essentially, a third-party-logistics firm may be defined as an external supplier that performs all or part of a company's logistics functions.

Among these, multiple logistics activities are included, those that are included are "integrated" or managed together, and they provide "solutions to logistics/supply chain problems.

Types of Third Party Logistics Providers

Transportation-Based

Warehouse/Distribution-Based

Forwarder-Based

Shipper/Management-Based

Financial-Based

Information-Based

Outsourced Logistics Services

Current-Future IT-Based Services

Next Generation of Logistics Outsourcing

Three Eras of Globalization

1400-1800

1800-2000

2000-now

First Era of Globalization

The First Era (1400-1800) was initially driven by countries seeking materials and goods not available in their own land.

Second Era of Globalization

The Second Era (1800-2000) was driven by companies seeking goods and materials, labor, economies of scale, and markets.

Third Era of Globalization

The Third Era of Globalization (2000-present) was significantly characterized by the fact that it is being powered by individuals and smaller organizations.

Supply Chains in a Global Economy

Economies and companies could improve their "wealth by allowing specialization of tasks.

The advantage is true as long as you can sell the increased volume that is produced. It is an important role of logistics to help extend the market area of countries or companies through improved efficiency to lower the "landed cost" in new market areas.

Global Markets and Strategy

The global business environment has changed significantly and become much more conducive to business activity between and among different countries

Success in the global market place requires developing a cohesive strategy, including product development, technology, marketing, manufacturing, and supply chains

The most pervasive and important global shipment method, accounting for two-thirds of all international movements.

Major advantages are low rates and the ability to transport a wide variety of products and shipment size.

Three major categories:

Liner Service

Charter Vessels

Private Carriers

Air

Fast Transit times

An advantage in packaging

Disadvantage of air carriage is high rates

Motor

Use motor transport when shipping goods to between the United States and Mexico or Canada.

It is very common in Europe.

Motor also plays a large part in intermodal shipments.

Rail

International railroad use is also highly similar to domestic rail use.

Intermodal container shipments by rail are increasing.

Maritime bridge concepts:

Land Bridge

Storage Facilities and Packaging

Transit sheds provide temporary storage while the goods await the next portion of the journey.

Carrier provided hold-on-dock storage free of charge until the vessel's next departure date.

Public warehouses are available for extended storage periods.

Bonded warehouses operate under customs agency's supervision and are used to store, repack, sort, or clean imported merchandise entered for warehousing without paying import duties while the goods are in storage.